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Dealing with the “d” word

by Richard Fleming

Analysis published recently by Real Capital Analytics (RCA) of deal flows suggests that Europe is only just starting to make progress with its distressed real estate loans. This is in marked contrast to the United States, where it is estimated that 58 percent of the $394 billion (€307 billion) of mortgages that hit trouble have now been resolved.

“Part of this has been US banks having the ability to deal with their debt, more US investors interested in taking on the workouts and also value appreciation that has returned assets into the black,” comments Simon Mallinson, RCA’s executive managing director EMEA.

Last year, the analysis found, European banks started to deal more aggressively with the huge balances of troubled property loans, some four years after the wave of distress flooded their balance sheets. Sales both of property and of non-performing loans secured by property rose